Administration unveils 2001 locality pay rates

White collar federal employees in San Francisco will get pay increases of almost 4.5 percent next year, while workers in Kansas City, Mo., Huntsville, Ala., and smaller cities across the United States will have to settle for raises of about 3.6 percent. Next year's pay raise, which will average 3.7 percent nationwide, includes both a 2.7 percent base pay increase and locality differentials that vary according to where federal employees work. The Office of Personnel Management released draft 2001 pay tables for various localities on Friday. The full tables are available on the OPM Web site. In addition to San Francisco employees, workers in Houston, Los Angeles, New York and Detroit will get increases of more than 4 percent in 2001. Washington-area workers will receive 3.81 percent increases. The "rest of U.S." rate, for workers outside major metropolitan areas, will be 3.57 percent. President Clinton issued an order Thursday implementing the new rates. On Friday, the largest federal employee union criticized the 3.7 percent average increase, saying it fails to close the salary gap between government and industry.

"As President Clinton prepares to leave office in January, he has yet again failed to fulfill the mandate of [the 1990 Federal Employees Pay Comparability Act] to bring federal wages up to the levels paid in the private sector," said Bobby L. Harnage, president of the American Federation of Government Employees.

Under FEPCA, a formula was created to close the gap between federal and private sector salaries over 10 years beginning in 1994. That formula would have resulted in a raise estimated to be as high as 16.6 percent next year.

A loophole in the law allows the President to issue smaller raises each year under certain conditions. The Clinton administration has always used that loophole because it believes the FEPCA methodology is flawed and because it does not want to increase federal spending with the higher FEPCA-formulated raises.

Other unions representing federal employees also expressed disappointment with the President's pay plan.

"Once again, it is unfortunate that federal employees are not being paid what they deserve. It is very disappointing that the administration hasn't adhered to the guidelines set forth in FEPCA," said Richard Brown, president of the National Federation of Federal Employees.

Colleen M. Kelley, president of the National Treasury Employees Union, welcomed the pay raise, but said it falls short of what is needed to make the government competitive with private industry in recruiting employees. "We need to move promptly toward a system that pays federal workers in a fair and competitive manner," said Kelley. "Higher pay for federal employees, both current and prospective, is a necessary investment in the future of America."

President Clinton Thursday praised federal workers, saying they are the "key to effective government performance." Clinton defended the 3.7 percent increase, saying a larger pay raise would make it difficult for agencies to meet their fiscal 2001 budgets.

"Federal program managers are already under considerable pressure to meet their budgets, while still providing quality service to the taxpayers. Increasing the federal employment costs at such an extraordinary rate would render those budgets inadequate to provide the planned level of services," said Clinton.

"In particular," Clinton said, "agencies that have the greatest responsibility for person-to-person service-the Social Security Administration, the Internal Revenue Service, and the Veterans Affairs healthcare programs, to name just three-could not be expected to bear double-digit pay increases without the most thorough review and adjustment of their budgets."

In his Thursday order, Clinton also said a higher raise would be likely to shock tight labor markets across the country. Implementing the full increase "would invite serious economic risks-in terms of the workings of the nation's labor markets, inflation, the costs of maintaining federal programs and the impact of the federal budget on the economy as a whole," he said.

Harnage dismissed that claim. "The President conjures up the bizarre argument that obeying the law, and allowing the 15 percent pay increase to go forward, would seriously disadvantage private sector employers and 'shock' the labor markets. This argument is absurd. The only reason the FEPCA raise would be large is because the pay gap is large," said Harnage.

Language authorizing the federal pay increase was included in the fiscal 2001 Treasury-Postal spending bill, but that bill has yet to be signed into law. Clinton vetoed the measure in late October, and Congress won't take up the bill again until it returns for a lame duck session Dec. 5.